In running a busy dealer group, inventory control and management has always been critical to ongoing business success. As groups expand and sales channels become increasingly fast-paced and digitized, the challenge that this poses for senior managers inevitably increases.
Put another way, without precise and up-to-date intelligence on the stock portfolio of the group as a whole, it is virtually impossible for the potential of individual dealer sites, or online marketing channels, to be achieved.
In this article, we look at some of the audit issues commonly experienced by dealer groups relying on manual inventory audit processes, and the impact that these can have on business performance. We’ll also discuss how the right digital audit solution can assist in turning this around.
Working with so many dealer groups and witnessing the dramatic changes to sales and marketing practices over the years, it’s easy to compile a shortlist of the basic inventory control issues that arise time and time again.
These issues can be isolated to individual sites or channels but are more often endemic in the organization, cutting across many roles and departments, and can only be identified (and corrected) by senior managers with an overview of the whole business.
This is inventory auditing 101 but it can be incredibly hard to achieve across multiple sites and with numerous routes to market. Manual audits, by their nature, tend to be out of date before they are even completed, so there’s no single source of ‘truth’ as to the size, location and value of the portfolio.
Manual audits usually involve a time-consuming, paper-based system used to record vehicle details while walking the vehicle lot. At best, this information is then manually entered into a central spreadsheet that can be accessed by management. This not only ties up resources but often highly skilled staff members that would be better utilized elsewhere.
One of the most common manual audit problems is data discrepancy. As we’ve already discussed, audit data is often out of date before the ink dries, so trying to reconcile this against the latest inventory movements from rapidly trading forecourts and digital channels is virtually impossible.
The data collected through a manual audit is only as robust as the audit process itself and the resource used to obtain it. Individual data errors often go unidentified and systemic issues in stock monitoring and control can go unnoticed for an extended period of time.
Unfortunately, the impact of these manual audit issues goes beyond the operational – unchecked they can have a serious impact on the underlying performance of the dealer group.
Without an accurate, single source of inventory data, it is impossible to keep sales teams or digital sales channels updated on stock availability. This leads to forecourt sales opportunities not being identified and gives a false view of vehicle availability for customers searching online.
A recent, real-life, example involved a customer sourcing a vehicle from a large dealership where the car in question was at another group site. After waiting four weeks for delivery, the customer was informed that, unfortunately, the vehicle had been sold via an online channel a few days before their order was processed and so had never been available.
In cases like this, the immediate impact is the lost sale, but the longer-term effect is a diminished reputation and devalued brand.
When funders begin to question the validity of a dealer’s management information or, worst still, identify compliance inconsistencies or errors, their confidence in providing or extending lines of credit can be severely shaken.
This is particularly the case for dealers utilizing flexible stock financing facilities, where complete and error-free reporting of the funded portfolio is essential. Unaccounted-for vehicles, or confusion over their sales status, can quickly lead to concerns over management control and result in credit being reduced or withheld.
Fundamentally, vehicle auditing should be a simple business and not require highly skilled resources to spend time manually looking for and recording vehicle details. Manual audits only require this level of input due to opportunities for errors to occur and the potential for dishonest or fraudulent activity. Remove these opportunities with a robust system and inventory auditing can be carried out by anyone.
For senior managers, the operational issues above can cause daily headaches that take time and effort to resolve. But, from a strategic perspective, the absence of accurate portfolio insight means a diminished ability to make informed decisions and to successfully plan for future growth.
If the picture painted above seems a little gloomy, the brighter outlook is that these manual auditing issues can be almost entirely eliminated with the introduction of a quality digital auditing alternative.
For many dealer organizations, the switch to a digital inventory audit process can be genuinely transformative, opening up new opportunities for growth that hadn’t been presented in the past.
Proactive management of the portfolio becomes possible, allowing sales opportunities to be maximized while enhanced funder confidence gives greater access to capital.
The most effective digital inventory audit solutions use technology to simplify the auditing process so that they can be conducted by any member of staff, while delivering accurate data and useful insight to those who need it.
Most solutions on the market will promise this so it’s a good idea to delve a little deeper to really understand what’s involved and how your business can benefit. Here are some key points to consider:
Does the system require the use of QR code stickers, NFC (Near Field Communication) tags, or other methods of vehicle identification that could be lost or tampered with? Advanced solutions do away with the need for these and instead, use smartphone apps with imaging technology to capture vehicle details and geotag their precise location at a point in time.
Read the Auto Dealer Inventory Audit Technology Guide for more information on the options available and the pros and cons of each.
> Gain clarity on both current and emerging technologies to support inventory auditing
> Understand how to select the best fit for your needs
> Discover the pros and cons in an easy-to-understand summary table
With data coming from numerous online and traditional sales channels as well as inventory audits, it’s essential that can be consolidated and reconciled into a single dashboard that gives a complete and accurate overview of the portfolio. The best solutions will also highlight any discrepancies and flag where intervention is required.
No two businesses are the same and any digital implementation should be based on a deep understanding of the organization and its specific needs. It’s important to choose a partner that offers dedicated support, particularly in integrating internal and external data sources, and provides a bespoke onboarding program to ensure all parties are trained and committed to making the new audit solution successful.
If you’re interested in learning more about digital audit solutions and how they can benefit your dealer group, click here to arrange for a no-obligation discussion with one of our experts.
